ava launches power station, page-8

Hi jiangsen,

I rang up ENB today to get further info on the AGM and Mark Babidge picked up the phone. He said the AGM is basically mostly about remuneration because everything else has been covered in the announcements ect.

I made the decision there and then not to go and took the opportunity to ask a few questions of which he was very forthcoming.

Firstly the industry values 1MW @ $1.4MIL AUD so if ENB do get to build their 168MW power station we are looking at a cap of $230mil+. I didn't get into revenues.

With regards to AVA's project he said it won't have a bearing on ENB because the energy demand is sufficient to sustain both power stations. He also stated they haven't all the required permits from the government to get the go ahead. AVA is also proposing to build their station on Noongar land and believes they will run into problems there.

ENB will not proceed until they have signed contracts. He said its government bureaucratic red tape that is holding the iron ore industry back in the midwest. In his opinion if its not sorted in the first half of next year it will never happen because the Asians will take their dollars somewhere else. If it doesn't get sorted he said ENB will take their business overseas because there are 3-4 potential projects they are looking at.

He was very scathing of the Carpenter government. When the premier of China arrived here the West Australian government provided them with coach buses instead of Limos of which you would if a head of state had $4.5bil to invest. The Chinese also must be very frustrated with the Carpenter government sitting on their hands as well.

So in a nutshell its people in the government sector who could never make it in the commercial world who are making life very difficult for the companies who want to get their projects up and running. He said the next 2-3 mths will be very telling.

If it doesn't go ahead IMO ENB will be a very successfully long term hold because the board have the experience and ambition to build at least one power station. Whether its in WA or somewhere else is yet to be seen. Off course from a time scale point of view its in everyone's interest for it to be the mid-west.

I got the feeling even if the mid-west project got the go ahead they will still venture into other projects overseas.

I wasn't expecting to speak to the managing director and the phone call caught me off guard a little. I wasn't prepared and didn't cover everything I would have like to. I'm going to give him a ring again in the next few months.

Hope this helps.